3.14 Global considerations

Question 1

Define global sourcing and Give a contemporary example

Answer 1

Global sourcing: the practice of seeking the most cost efficient materials and other inputs, including from other countries.

eg. Australian brand rip curl sources products such as footwear (eg. sandals) from China to take advantage of low labor costs

Question 2

pros and cons of global sourcing

Answer 2

pros
-reduces costs
-increase the capacity of total supply
-access materials that are not readily occurring in the domestic country
-Ability to source higher quality to source higher quality materials from overseas to improve end product quality

limitations
-long lead times (for manufactured goods)
-The supplier’s country ethical, environmental and legal standards

Question 3

define overseas manufacture

Answer 3

the production of a good in a country that is different to the location of the business’s headquarters